Insulin is a metabolic hormone that acts on target tissues to increase glucose uptake and energy storage. Insulin action is initiated through the binding to and activation of its cell surface receptor, whose intrinsic activity promotes tyrosine phosphorylation of a number of cellular proteins. It has been proposed that the intracellular region of the insulin receptor contains structural features that contribute to the pleiotropic actions of insulin. For example, the juxtamembrane domain associates with adaptor/effector molecules that may account for the specificity of many biological responses to insulin. In addition, the cytoplasmic region of the insulin receptor is characterized by the presence of reactive cysteine (Cys) thiol moiety whose activity, in turn, may be highly regulated in vivo by oxidation/reduction reactions. Given that some forms of insulin resistance may involve defects in insulin receptor-mediated signal transduction, the authors focused firstly here on providing new evidence for a receptor-specific signal that enhances the early insulin stimulated cascade of tyrosine phosphoryation and propagation of the downstream cascade. Secondly, the mechanism by which insulin regulates the formation of a complex between the insulin receptor and TRAP was investigated as it relates to caveolin function through tyrosine phosphorylation. Advance: #1) It is shown that expression of a minigene encoding a 23-amino acid fragment of the carboxyl terminal domain of the insulin receptor promotes insulin receptor activation and specific signal transduction pathways involving mitogenic and metabolic events in response to insulin. Although the receptor for insulin-like growth factor-I is a closely related member of the insulin receptor, its activity and function are not influenced by this peptide. These findings reveal a novel regulatory mechanism integral to the early steps in insulin signaling that may contribute to the functional specificity in insulin biological responses. #2) Interaction of the insulin receptor (IR) with a number of adaptor and effector molecules is critical for the modulation of insulin signaling. A thiol-reactive membrane-associated protein, termed TRAP, binds covalently to the cytoplasmic domain of the human IR beta-subunit when cells are treated with 1,6-bismaleimidohexane (BMH), a homobifunctional crosslinking reagent that reacts with sulfhydryl groups. As a step to further characterize this BMH response, we examined the formation of IR-TRAP complex in a number of cells overexpressing the human IR and in HepG2 cells. Insulin was found to increase crosslinking of hIR to TRAP both in adherent cells and cells in suspension but not when membrane preparations were reacted with BMH. The IR-TRAP complex was present largely in lipid rafts together with caveolin-1. Remarkably, insulin was found to induce physical interactions between tyrosine phosphorylated caveolin-1 and the IR-TRAP complex. Transient expression of a mutant caveolin-1 (F92A/V94A) with defective scaffolding domain markedly reduced the extent of IR-TRAP crosslinking, suggesting the importance of the scaffolding domain for interactions between caveolin-1, IR and/or TRAP in intact cells. With the use of immunofluorescence microscopy, colocalization of phosphocaveolin and the IR was observed at the apical side of insulin-stimulated cells. The formation of IR-TRAP complex, therefore, seems to be directly dependent of insulin and involves the spatial organization of caveolin-1-associated membrane microdomains. These results provide insight into the regulatory events that lead to the formation of IR-TRAP complex through caveolin signaling. Of interest, the catalytic function of the insulin receptor remains intact in the receptor-TRAP complex, which indicates that TRAP binds in a receptor domain that lies away from the kinase active site. Protein tyrosine phosphatases and IRS proteins have been recognized as modulators of insulin action through direct interaction with the insulin receptor: however, none of these well-known interacting proteins appear to be part of the receptor-TRAP complex. The nature of TRAP and its function in insulin signaling remain to be elucidated. Implications: Peripheral insulin resistance and type II diabetes mellitus are due to a defect in insulin signal transduction and some forms of insulin resistance may involve the receptor itself. Given that diabetes produces oxidative damage into cells, progressive and irreversible oxidation of reactive cysteine thiol moiety could affect insulin action by negatively regulating insulin receptor enzymatic function and/or its ability to interact with signaling molecules, including TRAP. Hence, the propagation and specificity of the insulin signal may be the target for oxidative inactivation. The present study is important because an increase in our understanding in the insulin receptor-TRAP interaction may provide a potential model for gene or pharmacological therapy for many forms of insulin resistance.